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Gibson Company manufactures molded candles that are finished by hand. The company developed the following standards for a new line of drip candles. Amount of direct materials per candle Price of direct materials per pound Quantity of labor per unit Price of direct labor per hour Total budgeted fixed overhead During Year 2, Gibson planned to produce 33,000 drip candles. Production lagged behind expectations, and it actually produced only 26,000 drip candles. At year-end, direct materials purchased and used amounted to 30,000 pounds at a unit price of $0.44 per pound. Direct labor costs were actually $8.20 per hour and 20,300 actual hours were worked to produce the drip candles. Overhead for the year actually amounted to $166,400. Overhead is applied to products using a predetermined overhead rate based on estimated units. Required a.&b. Compute the standard cost per candle for direct materials, direct labor, overhead and also the total standard cost for one drip candle. c.&d. Compute the actual cost per candle for direct materials, direct labor, overhead and also the total actual cost per candle. e. Compute the price and usage variances for direct materials and direct labor. f. Compute the fixed cost spending and volume variances. Complete this question by entering your answers in the tabs below. Cost Direct materials: Price variance Usage variance Direct labor: Price variance Usage variance Req A and B Req C and D Req E Req F Compute the price and usage variances for direct materials and direct labor. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Variance 1.10 pounds $ 0.50 0.70 hours $ 8.70/hour $ 201,300 F U U < Req C and D Req F >

Gibson Company manufactures molded candles that are finished by hand. The company developed the following standards for a new line of drip candles. Amount of direct materials per candle Price of direct materials per pound Quantity of labor per unit Price of direct labor per hour Total budgeted fixed overhead During Year 2, Gibson planned to produce 33,000 drip candles. Production lagged behind expectations, and it actually produced only 26,000 drip candles. At year-end, direct materials purchased and used amounted to 30,000 pounds at a unit price of $0.44 per pound. Direct labor costs were actually $8.20 per hour and 20,300 actual hours were worked to produce the drip candles. Overhead for the year actually amounted to $166,400. Overhead is applied to products using a predetermined overhead rate based on estimated units. Required a.&b. Compute the standard cost per candle for direct materials, direct labor, overhead and also the total standard cost for one drip candle. c.&d. Compute the actual cost per candle for direct materials, direct labor, overhead and also the total actual cost per candle. e. Compute the price and usage variances for direct materials and direct labor. f. Compute the fixed cost spending and volume variances. Complete this question by entering your answers in the tabs below. Cost Direct materials: Price variance Usage variance Direct labor: Price variance Usage variance Req A and B Req C and D Req E Req F Compute the price and usage variances for direct materials and direct labor. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Variance 1.10 pounds $ 0.50 0.70 hours $ 8.70/hour $ 201,300 F U U < Req C and D Req F >

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter9: Standard Costing: A Functional-based Control Approach
Section: Chapter Questions
Problem 20E: Jameson Company produces paper towels. The company has established the following direct materials...
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Gibson Company manufactures molded candles that are finished by hand. The company developed the following standards for a new line of drip candles. Amount of direct materials per candle Price of direct materials per pound Quantity of labor per unit Price of direct labor per hour Total budgeted fixed overhead During Year 2, Gibson planned to produce 33,000 drip candles. Production lagged behind expectations, and it actually produced only 26,000 drip candles. At year-end, direct materials purchased and used amounted to 30,000 pounds at a unit price of $0.44 per pound. Direct labor costs were actually $8.20 per hour and 20,300 actual hours were worked to produce the drip candles. Overhead for the year actually amounted to $166,400. Overhead is applied to products using a predetermined overhead rate based on estimated units. Required a.&b. Compute the standard cost per candle for direct materials, direct labor, overhead and also the total standard cost for one drip candle. c.&d. Compute the actual cost per candle for direct materials, direct labor, overhead and also the total actual cost per candle. e. Compute the price and usage variances for direct materials and direct labor. f. Compute the fixed cost spending and volume variances. Complete this question by entering your answers in the tabs below. Req A and B Req C and D Req E Cost Direct materials: Price variance Usage variance Direct labor: Price variance Usage variance Compute the price and usage variances for direct materials and direct labor. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Variance 1.10 pounds $ 0.50 0.70 hours $ 8.70/hour $ 201,300 F U Req F F U < Req C and D Req F >
Transcribed Image Text:Gibson Company manufactures molded candles that are finished by hand. The company developed the following standards for a new line of drip candles. Amount of direct materials per candle Price of direct materials per pound Quantity of labor per unit Price of direct labor per hour Total budgeted fixed overhead During Year 2, Gibson planned to produce 33,000 drip candles. Production lagged behind expectations, and it actually produced only 26,000 drip candles. At year-end, direct materials purchased and used amounted to 30,000 pounds at a unit price of $0.44 per pound. Direct labor costs were actually $8.20 per hour and 20,300 actual hours were worked to produce the drip candles. Overhead for the year actually amounted to $166,400. Overhead is applied to products using a predetermined overhead rate based on estimated units. Required a.&b. Compute the standard cost per candle for direct materials, direct labor, overhead and also the total standard cost for one drip candle. c.&d. Compute the actual cost per candle for direct materials, direct labor, overhead and also the total actual cost per candle. e. Compute the price and usage variances for direct materials and direct labor. f. Compute the fixed cost spending and volume variances. Complete this question by entering your answers in the tabs below. Req A and B Req C and D Req E Cost Direct materials: Price variance Usage variance Direct labor: Price variance Usage variance Compute the price and usage variances for direct materials and direct labor. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).) Variance 1.10 pounds $ 0.50 0.70 hours $ 8.70/hour $ 201,300 F U Req F F U < Req C and D Req F >
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